本版书共34章，分成11个部分。第一至三部分讨论估值与资本投资决策，其中包括证券投资组合理论、资产定价模型和资本成本；第四至八部分介绍红利政策、资本结构、期权（包括实物期权）、公司负债和风险管理等内容；第九部分包括财务分析、财务计划和运营资本管理等内容；第十部分则考察公司兼并、重组及世界范围内的公司治理问题；第十一部分全书总结。
本书理论阐述严谨，结构简洁清晰，语言诙谐生动，既可作为高校财务、会计、金融等专业的学生教材，也可供金融从业人员、企业财务经理实际经营过程中参考备用，是一本不可多得的权威著作。
本书至今已出版30年，是欧美学界共同推崇的难得一见的权威著作！金融危机之后，三位大师级的作者经过精心修改推出最新版第10版，为在前所未有的国际环境条件下立志成为财务经理的读者，介绍公司财务金融决策与实践，并进一步帮助其学习应用金融财务理论来解决实际工作中遇到的问题。
本书是金融财务专业的学生和从业者必读书籍之一！
本书旨在介绍公司财务决策与实践。我们无须解释为什么财务经理应该掌握与他们工作有关的实务方面的知识，但我们要强调的是：对于务实求真、精力充沛的财务经理来说，不必认为学习理论是烦心的事情。
对于如何处理日常事务，经理们依据经验就可以搞定。但是，最出色的管理者应该与时俱进。这样仅凭一些久经考验的经验法则来做事就不够了，他们还应该明白公司运作和市场运行的内在机理。换言之，他们需要掌握金融财务方面的理论。
这听起来是不是有点儿言过其实、危言耸听呢 事实并非如此。好的理论有助于我们及时把握周围正在发生什么，有助于我们在随世事变迁和必须对新情况进行分析时提出恰当的问题，也能让我们知晓对于什么问题不必杞人忧天。我们要在本书中向经理们展示，如何应用金融财务理论解决实际工作中遇到的问题。这是贯穿本书的主题。
当然，本书呈现的并非完美、放之四海而皆准的理论—没有理论能做到这一点。关于企业应该怎样做，金融经济学家们有几个著名的争论。我们不可能涉及所有这些争论，我们将列出各派主要观点，并告诉读者我们站在哪一边。
本书关注的是财务经理应该关注什么以及为什么要这样关注，也论及为增加公司价值财务经理应该采取怎样的行动。当我们在理论上指出财务经理们的行为出现错误时，我们还会说明他们行为背后可能隐藏的并不为人所知的原因。简言之，我们会尽力持公平客观的态度，但也会畅所欲言。
第10版新增内容
本书前面几版的成功给我们莫大的鼓舞，我们尽力使第10版做得更好。
本版有何新的内容 首先，我们对几章进行了改写并充实了内容。大部分内容仍然保留，但我们认为，修订的几章更加简明流畅。这些章节中也增加了更多来自真实世界的事例。
第1章现名为“企业目标和治理”。我们通过几个著名公司资本投资和融资决策的事例引出财务管理，我们解释了为什么利润最大化作为融资财务管理目标有重要意义的原因，我们还分析了为什么需要一个良好的治理和激励制度会鼓励管理者和雇员一起努力提升企业价值，并且行为合规。
第2章是由第9版的第2章和第3章合并而成，直接介绍如何进行现值计算。我们认为这样安排更易于理解。
第3章介绍债券估值，本章材料进行了重新安排和简化。内容主要集中于无违约债券，但也介绍公司负债和违约的风险（在 第23章，对公司负债和违约的风险进行详细讨论）。
第29章中介绍了短期和长期的财务计划的内容。我们认为，如果用两章来介绍财务计划过于烦琐和低效。
第28章全部是财务分析的内容，这对于那些想在本课程中早一点介绍这部分内容的教师来说就方便多了。我们介绍了为什么财务报表和各种比率有助于揭示真正的公司价值、盈利能力、效率和财务实力和状况。
始于2007年的金融危机充分证明了一个功能良好的金融体系的重要性，以及如果运转不灵所带来的问题。有人认为金融危机证明了现代金融制度存在许多弊端，我们认为不尽然，我们更愿意相信这是一次警告，提醒我们要遵守与如下方面相关的基本行为准则：良好治理制度所具有的重要意义、合理的激励管理制度、合理的资本结构和有效的风险管理。
危机的事例和讨论在本书随处可见，第1章我们讨论了良好治理的重要性和代理成本的问题，其他章节也因危机改写了许多内容；第12章讨论的是企业管理者的薪酬；第13章讨论市场效率时扩展到资产价格泡沫；第14章讨论金融机构时包括了危机原因和进程的讨论；第23章讨论了AIG公司的崩溃；第30章对危机如何影响货币市场基金进行了解释。
本书第1版出版于1981年，基本原理大体不变，但是过去30年中理论和实务领域还是发生了很大的变革。金融研究人员对于财务经理应该怎么做关注不多，而把更多的精力放在理解和解释他们在实践中的所作所为。换言之，金融财务学已经变得越来越侧重于实证分析，而较少进行规范分析。例如，当前我们对于企业的资本投资实务、派息和融资政策概括得非常详细。我们对这些概述重新进行了审视，观察它们怎样阐明理论争论。
与二三十年前相比，许多金融财务决策似乎并非可以清晰地决断。例如，提出如下问题并无多大意义，分红率高是好是坏或者公司该举债多少，正确的答案是“依据具体情况而定”，因此我们提出了对不同政策的支持和反对意见。我们提出：“制定融资政策时，财务经理应注意什么问题？”当我们在第16章考察公司的分红决策时，读者将看到所强调的不同重点。
与前面版别相比，本版有一些变化。我们认为，财务经理是在前所未有的国际环境条件下任职，所以需要熟悉不同财务管理、不同金融市场和金融机构的国别差异。第27章和第30章专门讨论的是从国际角度所涉及的问题。在其他章节，我们也穿插进行跨国比较和采用美国之外的事例。我们希望这些素材一方面有助于更好地理解更多的金融财务环境，另一方面对于其他国家的许多读者也大有裨益。
稍有常识的人都知道，做加法比做减法要容易。为了增加新的内容，我们需要进行一些合理删减。我们并不想指出去掉了哪些，因为我们不想这种删减为人瞩目。
便于阅读和学习的结构设计
本书每章都有开篇引言和小结，同时列出供读者进阶阅读的文献和说明。现在进阶阅读的文献非常多，我们并不想列出每一篇重要文献，只是给出了一些综述性文献或有较大影响的书籍，许多相关文献以脚注形式给出。
书中每章后都配有一组练习题，这是进行基本概念和相关数据计算的题目，还有少量具有一定难度的挑战性思考题。练习题中有些问题在书后给出了答案。
本书还包括了10个章后微型案例，并配有一些具体问题，以指导案例分析。
像Excel之类的电子表格已经为许多会计金融计算量身定制了一些程序。我们在一些章节中利用专栏对最常用的会计金融函数进行了介绍，并且进行了简单的练习。我们介绍了如何使用Excel函数的功能键来启动函数和输入数据。我们认为这比记住每一个函数公式要简单得多。
教材中许多表格都是电子表格形式，对应的表格可以从本书网站下载。
本版书共34章，分成11个部分。第一至三部分讨论估值与资本投资决策，其中包括证券投资组合理论、资产定价模型和资本成本；第四至八部分介绍红利政策、资本结构、期权（包括实物期权）、公司负债和风险管理等内容；第九部分包括财务分析、财务计划和运营资本管理等内容；第十部分则考察公司兼并、重组及世界范围内的公司治理问题；第十一部分是全书总结。
我们知道，不少教师会对本书所涉及的内容自己取舍，也希望按不同的内容次序讲授，为此我们对内容的安排可以方便教师按不同的逻辑思路安排教学。例如，读者可以在掌握估值和资本投资理论章节之前无障碍地阅读有关财务报表分析和财务计划的内容。
理查德 A. 布雷利
斯图尔特 C. 迈尔斯
弗兰克林·艾伦
财务管理/金融投资
本书至今出版30年，是欧美学界共同推崇的难得一见的权威著作！最新版第10版也是金融危机之后，三位大师级的作者再次经过精心修改，为立志成为财务经理的读者介绍公司财务金融决策与实践，并在前所未有的国际环境条件下进一步学习应用金融财务理论来解决实际工作中遇到的问题，是金融财务专业的学生和从业者必读书籍！
封底加图：
1）财务管理：311092）29552金融市场
赵英军 译注：暂无简介
出版说明
作者简介
前言
第一部分 价 值 理 论
第1章 企业目标和治理 1
1.1 公司的投资决策和融资决策 2
1.2 财务经理所扮演的角色和资本的机会成本 6
1.3 公司的目标 9
1.4 代理问题和公司治理 12
本章小结 15
练习题 16
附录净现值准则的基本原则 18
第2章 现值计算 20
2.1 未来价值和现值 21
2.2 永续年金与年金的便捷计算 27
2.3 成长型永续年金与年金的便捷计算 33
2.4 利息支付和标价 35
本章小结 39
练习题 39
第3章 债券估值 45
3.1 利用现值公式进行债券估值 46
3.2 利率怎样影响债券价格 49
3.3 利率的期限结构 53
3.4 期限结构的解释 57
3.5 名义利率与实际利率 59
3.6公司债券和违约风险 65
本章小结 68
推荐阅读 69
练习题 69
第4章 普通股的价值 74
4.1 普通股的转让 75
4.2 普通股的估值 76
4.3 权益资本成本的估计 81
4.4 股票价格与每股收益的关系 87
4.5 采用现金流量贴现的方法对企业估值 90
本章小结 94
推荐阅读 95
练习题 95
微型案例 Reeby Sports公司 99
第5章 净现值与其他准则 101
5.1 基础知识回顾 101
5.2 回收期法 105
5.3 内部收益率（贴现现金流收益率） 107
5.4 资源约束下的资本投资选择 115
本章小结 119
推荐阅读 120
练习题 120
微型案例 维格公司CFO的再次来电 124
第6章 根据净现值法则进行投资决策 127
6.1 净现值法则的应用 128
6.2 示例：IM&C公司的肥料项目 132
6.3 投资的最佳时间选择 140
6.4等值年现金流量 141
本章小结 146
练习题 146
微型案例 新经济运输公司A与B 153
第二部分 风险
第7章 风险与收益概论 156
7.1 百年资本市场简述 156
7.2 投资组合风险的度量 163
7.3 投资组合风险的计算 170
7.4 证券对投资组合风险的影响 174
7.5 分散化与价值叠加 177
本章小结 178
推荐阅读 179
练习题 179
第8章 投资组合理论和资本资产定价模型 185
8.1 哈里·马科维茨与投资组合理论 185
8.2 风险与收益的关系 192
8.3 资本资产定价模型的验证与作用 195
8.4 其他理论 199
本章小结 203
推荐阅读 204
练习题 204
微型案例 约翰与玛莎的投资组合选择 211
第9章 风险和资本成本 213
9.1 公司资本成本与项目资本成本 214
9.2 计算权益成本 217
9.3 分析项目风险 221
9.4 作为风险调整手段的确定性等值 227
本章小结 232
推荐阅读 233
练习题 233
微型案例 琼斯家族公司 237
第三部分 资本预算实务
第10章 项目分析 240
10.1 资本投资过程 241
10.2 敏感性分析 243
10.3 蒙特卡罗模拟 249
10.4 实物期权与决策树 253
本章小结 260
推荐阅读 261
练习题 262
微型案例 Waldo County公司 266
第11章 投资、战略与经济租金 268
11.1 参照市场价值的重要性 268
11.2 经济租金与竞争优势 273
11.3 玛文公司的新技术开发决策 276
本章小结 283
推荐阅读 284
练习题 284
微型案例 Ecsy可乐公司 289
第12章 代理问题、薪酬与业绩评估 290
12.1 激励与薪酬 290
12.2 绩效评估与奖励：留存收益与EVA 298
12.3 会计指标评估绩效时的偏差 301
本章小结 307
推荐阅读 307
练习题 308
第四部分 融资决策与市场有效性
第13章 有效市场与行为金融学 312
13.1 净现值回顾 313
13.2 什么是有效市场 314
13.3 市场有效性质疑 321
13.4 行为金融学 326
13.5 市场有效性的六点启示 329
本章小结 335
推荐阅读 336
练习题 337
第14章 公司融资概述 341
14.1 公司融资方式 341
14.2 普通股 345
14.3 负债 351
14.4 金融市场与金融机构 354
本章小结 357
推荐阅读 358
练习题 359
第15章 公司的证券发行 362
15.1 创业资本 362
15.2 首次公开发行 366
15.3 IPO其他的发行方式 375
15.4 上市公司的证券发售 376
15.5 私募发行与公开发行 381
本章小结 382
推荐阅读 383
练习题 383
附录 玛文公司新股发行的招股说明书 387
第五部分 资金支出政策与资本结构
第16章 股利政策 391
16.1 红利发放的一些数据 391
16.2 公司股利发放与股票回购 392
16.3 公司股利政策的决定 394
16.4 股利发放与股票回购的信息解读 395
16.5 股利政策争议 397
16.6 保守的右派 402
16.7 税收与激进的左派 404
16.8 中庸的中间派 409
本章小结 411
推荐阅读 412
练习题 412
第17章 负债政策的重要性 418
17.1 基于无税竞争经济的财务杠杆效应 419
17.2 财务风险与期望收益 424
17.3 加权平均资本成本 428
17.4 税后加权资本成本总结 433
本章小结 434
推荐阅读 434
练习题 435
第18章 公司负债额度 440
18.1 公司税收 440
18.2 公司税与个人税 444
18.3 财务危机的成本 447
18.4 融资选择的优先次序 460
本章小结 465
推荐阅读 466
练习题 467
第19章 融资与估值 471
19.1 税后加权平均资本成本 471
19.2 公司的估值 475
19.3 WACC应用实务 479
19.4 调整净现值 486
19.5 问题解答 490
本章小结 492
推荐阅读 493
练习题 494
附录 可靠名义现金流的贴现 498
第六部分 期权
第20章 理解期权 502
20.1 看涨期权、看跌期权和股票 503
20.2 期权的金融魔力 507
20.3 期权价值的决定因素 513
本章小结 519
推荐阅读 519
练习题 519
第21章 期权的估值 525
21.1 一个简化的期权定价模型 525
21.2 二项式期权定价法 530
21.3 布莱克-斯科尔斯公式 534
21.4 布莱克-斯科尔斯公式的实际运用 538
21.5 期权价值简述 542
21.6 期权大观 543
本章小结 544
推荐阅读 544
练习题 545
微型案例 布鲁斯·霍尼保的发明 549
附录 股权稀释对期权价值的影响 550
第22章 实物期权 554
22.1 后续投资机会的价值 554
22.2 时间选择期权 558
22.3 项目放弃期权 561
22.4 弹性生产 566
22.5 飞机购买期权 567
22.6 概念性问题 569
本章小结 571
推荐阅读 572
练习题 572
第七部分 债 务 融 资
第23章 信用风险与公司债务的价值 577
23.1 公司债务的收益 577
23.2 违约期权 581
23.3 债券评级与坏账概率 587
23.4 违约概率的预估 588
23.5 风险价值 592
本章小结 594
推荐阅读 594
练习题 595
第24章 各类债务 597
24.1 国内债券、外国债券和欧洲美元债券 598
24.2 债券合约 599
24.3 担保和清偿优先权 601
24.4 偿付准备 603
24.5 债务契约 603
24.6 可转换债券与认股权证 607
24.7 私募与项目融资 612
24.8 债券市场创新 615
本章小结 617
推荐阅读 618
练习题 619
微型案例 桑戴克先生令人震惊的死亡 623
第25章 租赁 625
25.1 租赁概述 625
25.2 租赁的动因 626
25.3 经营租赁 630
25.4 融资租赁的估值 632
25.5 融资租赁的时机 637
25.6 杠杆租赁 638
本章小结 640
推荐阅读 640
练习题 641
第八部分 风 险 管 理
第26章 管理风险 645
26.1 为什么需要管理风险 645
26.2 保险 648
26.3 使用期权来降低风险 651
26.4 远期合约与期货合约 652
26.5 互换 660
26.6如何进行套期保值 664
26.7 “衍生证券”是野蛮世界吗 666
本章小结 668
推荐阅读 669
练习题 670
第27章 管理国际风险 676
27.1 外汇市场 676
27.2 基本关系 678
27.3 货币风险的对冲 687
27.4 外汇风险与国际投资决策 690
27.5 政治风险 694
本章小结 696
推荐阅读 697
练习题 698
微型案例 爱克思塔公司 702
第九部分 财务规划与营运资本管理
第28章 财务分析 704
28.1 财务报表 704
28.2 劳氏公司的财务报表 705
28.3 劳氏公司财务状况评估 708
28.4 效率指标 713
28.5 资产收益率分析：杜邦财务分析体系 714
28.6 财务杠杆指标 716
28.7 流动性指标 718
28.8 对财务比率的解析 720
本章小结 724
推荐阅读 724
练习题 725
第29章 财务计划 731
29.1 短期财务决策与长期财务决策的联系 731
29.2 追踪现金变动的足迹 734
29.3 现金预算 737
29.4 短期融资计划 740
29.5 长期财务计划 743
29.6 企业成长与外部融资 748
本章小结 749
推荐阅读 750
练习题 750
第30章 营运资本管理 757
30.1 存货 758
30.2 信用管理 760
30.3 现金 766
30.4 适销证券 771
30.5 短期借款来源 777
本章小结 782
推荐阅读 784
练习题 784
第十部分 兼并、公司控制与公司治理
第31章 兼并 792
31.1 合理的兼并动因 792
31.2 或有的兼并动因 798
31.3 兼并收益与成本的估计 801
31.4 兼并业务 805
31.5 委托权争夺、接管与公司控制权市场 808
31.6 兼并与经济 814
本章小结 816
推荐阅读 817
练习题 817
附录 混业兼并与价值叠加 820
第32章 公司重组 822
32.1 杠杆收购 822
32.2 公司财务中的聚变与裂变 827
32.3 私募股权 831
32.4 破产 837
本章小结 842
推荐阅读 843
练习题 844
第33章 世界各国的公司治理与公司控制 846
33.1 金融市场与金融机构 846
33.2 所有权、控制权与公司治理 851
33.3 这些差异重要吗 859
本章小结 863
推荐阅读 864
练习题 864
第十一部分 总结
第34章 总结：已知与未知的财务理论 866
34.1 已知的财务理论：七个最重要的财务理念 866
34.2 未知的财务理论：十个待解决的财务问题 869
34.3 结束语 875
附录 部分练习题答案 876
Contents
IPart OneValue
1 Goals and Governance of the Firm1
1-1 Corporate Investment and Financing Decisions2
Investment Decisions/Financing Decisions/What Is a Corporation
1-2 The Role of the Financial Manager and the Opportunity Cost of Capital6
The Investment Trade-off
1-3 Goals of the Corporation9
Shareholders Want Managers to Maximize Market Value/A Fundamental Result/Should Managers Look After the Interests of Their Shareholders /Should Firms Be Managed for Shareholders or All Stakeholders
1-4 Agency Problems and Corporate Governance12
Pushing Subprime Mortgages: Value Maximization Run Amok, or an Agency Problem /Agency Problems Are Mitigated by Good Systems of Corporate Governance
Summary15爼燩roblem Sets16爼燗ppendix: Foundations of the Net Present Value Rule18
2 How to Calculate Present Values20
2-1 Future Values and Present Values21
Calculating Future Values/Calculating Present Values/Calculating the Present Value of an Investment Opportunity/Net Present Value/Risk and Present Value/Present Values and Rates of Return/Calculating Present Values When There Are Multiple Cash Flows/The Opportunity Cost of Capital
2-2 Looking for Shortcuts桺erpetuities and Annuities27
How to Value Perpetuities/How to Value Annuities/PV Annuities Due/Calculating Annual Payments/ Future Value of an Annuity
2-3 More Shortcuts桮rowing Perpetuities and Annuities33
Growing Perpetuities/Growing Annuities
2-4 How Interest Is Paid and Quoted35
Continuous Compounding
Summary39爼燩roblem Sets39
3 Valuing Bonds45
3-1 Using the Present Value Formula to Value Bonds46
A Short Trip to Paris to Value a Government Bond/Back to the United States: Semiannual Coupons and Bond Prices
3-2 How Bond Prices Vary with Interest Rates49
Duration and Volatility
3-3 The Term Structure of Interest Rates53
Spot Rates, Bond Prices, and the Law of One Price/Measuring the Term Structure/Why the Discount Factor Declines as Futurity Increases梐nd a Digression on Money Machines
3-4 Explaining the Term Structure57
Expectations Theory of the Term Structure/Introducing Risk/Inflation and Term Structure
3-5 Real and Nominal Rates of Interest59
Indexed Bonds and the Real Rate of Interest/What Determines the Real Rate of Interest /Inflation and Nominal Interest Rates
3-6 Corporate Bonds and the Risk of Default65
Corporate Bonds Come in Many Forms
Summary68爼燜urther Reading69牋Problem Sets69
4 The Value of Common Stocks74
4-1 How Common Stocks Are Traded75
4-2 How Common Stocks Are Valued76
Valuation by Comparables/The Determinants of Stock Prices/Today抯 Price/But What Determines Next Year抯 Price
4-3 Estimating the Cost of Equity Capital81
Using the DCF Model to Set Gas and Electricity Prices/Dangers Lurk in Constant-Growth Formulas
4-4 The Link Between Stock Price and Earnings per Share87
Calculating the Present Value of Growth Opportunities for Fledgling Electronics
4-5 Valuing a Business by Discounted Cash Flow90
Valuing the Concatenator Business/Valuation Format/Estimating Horizon Value/A Further Reality Check
Summary94爼燜urther Reading95Problem Sets95爼燤ini-Case: Reeby Sports99
5 Net Present Value and Other Investment Criteria101
5-1 A Review of the Basics101
Net Present Value抯 Competitors/Three Points to Remember about NPV/NPV Depends on Cash Flow, Not on Book Returns
5-2 Payback105
Discounted Payback
5-3 Internal (or Discounted-Cash-Flow) Rate of Return107
Calculating the IRR/The IRR Rule/Pitfall 1桳ending or Borrowing /Pitfall 2桵ultiple Rates of Return/Pitfall 3桵utually Exclusive Projects/Pitfall 4梂hat Happens When There Is More Than One Opportunity Cost of Capital /The Verdict on IRR
5-4 Choosing Capital Investments When Resources Are Limited115
An Easy Problem in Capital Rationing/Uses of Capital Rationing Models
Summary119爼燜urther Reading120
Problem Sets120Mini-Case: Vegetron抯 CFO Calls Again124
6 Making Investment Decisions with the Net Present Value Rule127
6-1 Applying the Net Present Value Rule128
Rule 1: Only Cash Flow Is Relevant/Rule 2: Estimate Cash Flows on an Incremental Basis/Rule 3: Treat Inflation Consistently
6-2 Example桰M&C扴 Fertilizer Project132
Separating Investment and Financing Decisions/Investments in Working Capital/A Further Note on Depreciation/A Final Comment on Taxes/Project Analysis/Calculating NPV in Other Countries and Currencies
6-3 Investment Timing140
6-4 Equivalent Annual Cash Flows141
Investing to Produce Reformulated Gasoline at California Refineries/Choosing Between Long- and Short-Lived Equipment/Equivalent Annual Cash Flow and Inflation/ Equivalent Annual Cash Flow and Technological Change/Deciding When to Replace an Existing Machine
Summary146爼燩roblem Sets146Mini-Case: New Economy Transport (A) and (B)153
IPart TwoRisk
7 Introduction to Risk and Return156
7-1 Over a Century of Capital Market History in One Easy Lesson156
Arithmetic Averages and Compound Annual Returns/Using Historical Evidence to Evaluate Today抯 Cost of Capital/Dividend Yields and the Risk Premium
7-2 Measuring Portfolio Risk163
Variance and Standard Deviation/Measuring Variability/How Diversification Reduces Risk
7-3 Calculating Portfolio Risk170
General Formula for Computing Portfolio Risk/Limits to Diversification
7-4 How Individual Securities Affect Portfolio Risk174
Market Risk Is Measured by Beta/Why Security Betas Determine Portfolio Risk
7-5 Diversification and Value Additivity177
Summary178爼燜urther Reading179 Problem Sets179
8 Portfolio Theory and the Capital Asset Model Pricing185
8-1 Harry Markowitz and the Birth of Portfolio Theory185
Combining Stocks into Portfolios/We Introduce Borrowing and Lending
8-2 The Relationship between Risk and Return192
Some Estimates of Expected Returns/Review of the Capital Asset Pricing Model/What If a Stock Did Not Lie on the Security Market Line
8-3 Validity and Role of the Capital Asset Pricing Model195
Tests of the Capital Asset Pricing Model/Assumptions behind the Capital Asset Pricing Model
8-4 Some Alternative Theories199
Arbitrage Pricing Theory/A Comparison of the Capital Asset Pricing Model and Arbitrage Pricing Theory/The Three-Factor Model
Summary203爼燜urther Reading204
Problem Sets204Mini-Case: John and Marsha on Portfolio Selection211
9 Risk and the Cost of Capital213
9-1 Company and Project Costs of Capital214
Perfect Pitch and the Cost of Capital/Debt and the Company Cost of Capital
9-2 Measuring the Cost of Equity217
Estimating Beta/The Expected Return on Union Pacific Corporation抯 Common Stock/ Union Pacific抯 After-Tax Weighted-Average Cost of Capital/Union Pacific抯 Asset Beta
9-3 Analyzing Project Risk221
What Determines Asset Betas /Don抰 Be Fooled by Diversifiable Risk/Avoid Fudge Factors in Discount Rates/Discount Rates for International Projects
9-4 Certainty Equivalents桝nother Way to Adjust for Risk227
Valuation by Certainty Equivalents/When to Use a Single Risk-Adjusted Discount Rate for Long-Lived Assets/A Common Mistake/When You Cannot Use a Single Risk-Adjusted Discount Rate for Long-Lived Assets
Summary232爼燜urther Reading233 Problem Sets233Mini-Case: The Jones Family, Incorporated237
IPart ThreeBest Practices in Capital Budgeting
10 Project Analysis240
10-1 The Capital Investment Process241
Project Authorizations梐nd the Problem of Biased Forecasts/Postaudits
10-2 Sensitivity Analysis243
Value of Information/Limits to Sensitivity Analysis/Scenario Analysis/Break-Even Analysis/Operating Leverage and the Break-Even Point
10-3 Monte Carlo Simulation249
Simulating the Electric Scooter Project
10-4 Real Options and Decision Trees253
The Option to Expand/The Option to Abandon/Production Options/Timing Options/More on Decision Trees/Pro and Con Decision Trees
Summary260爼燜urther Reading261
Problem Sets262
Mini-Case: Waldo County266
11 Investment, Strategy, and Economic Rents268
11-1 Look First to Market Values268
The Cadillac and the Movie Star
11-2 Economic Rents and Competitive Advantage273
11-3 Marvin Enterprises Decides to Exploit a New Technology: an Example276
Forecasting Prices of Gargle Blasters / The Value of Marvin抯 New Expansion / Alternative Expansion Plans / The Value of Marvin Stock / The Lessons of Marvin Enterprises
Summary283爼燜urther Reading284Problem Sets284
Mini-Case: Ecsy-Cola289
12 Agency Problems, Compensation, and Performance Measurement290
12-1 Incentives and Compensation290
Agency Problems in Capital Budgeting/ Monitoring/Management Compensation/Incentive Compensation
12-2 Measuring and Rewarding Performance: Residual Income and EVA298
Pros and Cons of EVA
12-3 Biases in Accounting Measures of Performance301
Example: Measuring the Profitability of the Nodhead Supermarket/Measuring Economic Profitability/Do the Biases Wash Out in the Long Run /What Can We Do about Biases in Accounting Profitability Measures /Earnings and Earnings Targets
Summary307爼燜urther Reading307Problem Sets308
IPart FourFinancing Decisions and Market Efficiency
13 Efficient Markets and Behavioral Finance312
13-1 We Always Come Back to NPV313
Differences between Investment and Financing Decisions
13-2 What Is an Efficient Market 314
A Startling Discovery: Price Changes Are Random/Three Forms of Market Efficiency/Efficient Markets: The Evidence
13-3 The Evidence against Market Efficiency321
Do Investors Respond Slowly to New Information /Bubbles and Market Efficiency
13-4 Behavioral Finance326
Limits to Arbitrage/Incentive Problems and the Subprime Crisis
13-5 The Six Lessons of Market Efficiency329
Lesson 1: Markets Have No Memory/Lesson 2: Trust Market Prices/Lesson 3: Read the Entrails/Lesson 4: There Are No Financial Illusions/Lesson 5: The Do-It-Yourself Alternative/Lesson 6: Seen One Stock, Seen Them All/What if Markets Are Not Efficient Implications for the Financial Manager
Summary335爼燜urther Reading336Problem Sets337
14 An Overview of Corporate Financing341
14-1 Patterns of Corporate Financing341
Do Firms Rely Too Much on Internal Funds /How Much Do Firms Borrow
14-2 Common Stock345
Ownership of the Corporation/Voting Procedures/Dual-class Shares and Private Benefits/Equity in Disguise/Preferred Stock
14-3 Debt351
Debt Comes in Many Forms/A Debt by Any Other Name/Variety抯 the Very Spice of Life
14-4 Financial Markets and Institutions354
The Financial Crisis of 2007 009/The Role of Financial Institutions
Summary357爼燜urther Reading358Problem Sets359
15 How Corporations Issue Securities362
15-1 Venture Capital362
The Venture Capital Market
15-2 The Initial Public Offering366
Arranging an Initial Public Offering/The Sale of Marvin Stock/The Underwriters/Costs of a New Issue/Underpricing of IPOs/Hot New-Issue Periods
15-3 Alternative Issue Procedures for IPOs375
Types of Auction: A Digression
15-4 Security Sales by Public Companies376
General Cash Offers/International Security Issues/The Costs of a General Cash Offer/Market Reaction to Stock Issues/Rights Issues
15-5 Private Placements and Public Issues381
Summary382爼燜urther Reading383Problem Sets383 Appendix: Marvin抯 New-Issue Prospectus387
IPart FivePayout Policy and Capital Structure
16 Payout Policy391
16-1 Facts about Payout391
16-2 How Firms Pay Dividends and Repurchase Stock392
How Firms Repurchase Stock
16-3 How Do Companies Decide on Payouts 394
16-4 The Information in Dividends and Stock Repurchases395
The Information Content of Share Repurchases
16-5 The Payout Controversy397
Dividend Policy Is Irrelevant in Perfect Capital Markets/Dividend Irrelevance桝n Illustration/Calculating Share Price/Stock Repurchase/Stock Repurchase and Valuation
16-6 The Rightists402
Payout Policy, Investment Policy, and Management Incentives
16-7 Taxes and the Radical Left404
Why Pay Any Dividends at All /Empirical Evidence on Dividends and Taxes/The Taxation of Dividends and Capital Gains/Alternative Tax Systems
16-8 The Middle-of-the-Roaders409
Payout Policy and the Life Cycle of the Firm
Summary411爼燜urther Reading412Problem Sets412
17 Does Debt Policy Matter 418
17-1 The Effect of Financial Leverage in a Competitive Tax-free Economy419
Enter Modigliani and Miller/The Law of Conservation of Value/An Example of Proposition 1
17-2 Financial Risk and Expected Returns424
Proposition 2/How Changing Capital Structure Affects Beta
17-3 The Weighted-Average Cost of Capital428
Two Warnings/Rates of Return on Levered Equity桾he Traditional Position/Today抯 Unsatisfied Clienteles Are Probably Interested in Exotic Securities/Imperfections and Opportunities
17-4 A Final Word on the After-Tax Weighted-Average Cost of Capital433
Summary434爼燜urther Reading434Problem Sets435
18 How Much Should a Corporation Borrow 440
18-1 Corporate Taxes440
How Do Interest Tax Shields Contribute to the Value of Stockholders Equity /Recasting Merck抯 Capital Structure/MM and Taxes
18-2 Corporate and Personal Taxes444
18-3 Costs of Financial Distress447
Bankruptcy Costs/Evidence on Bankruptcy Costs/Direct versus Indirect Costs of Bankruptcy/Financial Distress without Bankruptcy/Debt and Incentives/Risk Shifting: The First Game/Refusing to Contribute Equity Capital: The Second Game/And Three More Games, Briefly/What the Games Cost/Costs of Distress Vary with Type of Asset/The Trade-off Theory of Capital Structure
18-4 The Pecking Order of Financing Choices460
Debt and Equity Issues with Asymmetric Information/ Implications of the Pecking Order/The Trade-off Theory vs. the Pecking-Order Theory桽ome Recent Tests/The Bright Side and the Dark Side of Financial Slack/Is There a Theory of Optimal Capital Structure
Summary465爼燜urther Reading466Problem Sets467
19 Financing and Valuation471
19-1 The After-Tax Weighted-Average Cost of Capital471
Review of Assumptions
19-2 Valuing Businesses475
Valuing Rio Corporation/Estimating Horizon Value/WACC vs. the Flow-to-Equity Method
19-3 Using WACC in Practice479
Some Tricks of the Trade/Mistakes People Make in Using the Weighted-Average Formula/Adjusting WACC when Debt Ratios and Business Risks Differ/Unlevering and Relevering Betas/The Importance of Rebalancing/The Modigliani朚iller Formula, Plus Some Final Advice
19-4 Adjusted Present Value486
APV for the Perpetual Crusher/Other Financing Side Effects/APV for Businesses/APV for International Investments
19-5 Your Questions Answered490
Summary492爼燜urther Reading493Problem Sets494Appendix: Discounting Safe, Nominal Cash Flows498
IPart SixOptions
20 Understanding Options502
20-1 Calls, Puts, and Shares503
Call Options and Position Diagrams/Put Options/Selling Calls, Puts, and Shares/Position Diagrams Are Not Profit Diagrams
20-2 Financial Alchemy with Options507
Spotting the Option
20-3 What Determines Option Values 513
Risk and Option Values
Summary519爼燜urther Reading519Problem Sets519
21 Valuing Options525
21-1 A Simple Option-Valuation Model525
Why Discounted Cash Flow Won抰 Work for Options/Constructing Option Equivalents from Common Stocks and Borrowing/Valuing the Google Put Option
21-2 The Binomial Method for Valuing Options530
Example: The Two-Stage Binomial Method/The General Binomial Method/The Binomial Method and Decision Trees
21-3 The Black朣choles Formula534
Using the Black朣choles Formula/The Risk of an Option/The Black朣choles Formula and the Binomial Method
21-4 Black朣choles in Action538
Executive Stock Options/Warrants/Portfolio Insurance/Calculating Implied Volatilities
21-5 Option Values at a Glance542
21-6 The Option Menagerie543
Summary544爼燜urther Reading544Problem Sets545 Mini-Case: Bruce Honiball抯 Invention549Appendix: How Dilution Affects Option Value550
22 Real Options554
22-1 The Value of Follow-on Investment Opportunities554
Questions and Answers about Blitzen抯 Mark II/Other Expansion Options
22-2 The Timing Option558
Valuing the Malted Herring Option/Optimal Timing for Real Estate Development
22-3 The Abandonment Option561
The Zircon Subductor Project/Abandonment Value and Project Life/Temporary Abandonment
22-4 Flexible Production566
22-5 Aircraft Purchase Options567
22-6 A Conceptual Problem 569
Practical Challenges
Summary571爼燜urther Reading572Problem Sets572
IPart SevenDebt Financing
23 Credit Risk and the Value of Corporate Debt577
23-1 Yields on Corporate Debt577
What Determines the Yield Spread
23-2 The Option to Default581
How the Default Option Affects a Bond抯 Risk and Yield/A Digression: Valuing Government Financial Guarantees
23-3 Bond Ratings and the Probability of Default587
23-4 Predicting the Probability of Default588
Credit Scoring/Market-Based Risk Models
23-5 Value at Risk592
Summary594爼燜urther Reading594
Problem Sets595
24 The Many Different Kinds of Debt597
24-1 Domestic Bonds, Foreign Bonds, and Eurobonds598
24-2 The Bond Contract599
Indenture, or Trust Deed/The Bond Terms
24-3 Security and Seniority601
Asset-Backed Securities
24-4 Repayment Provisions603
Sinking Funds/Call Provisions
24-5 Debt Covenants605
24-6 Convertible Bonds and Warrants607
The Value of a Convertible at Maturity/Forcing Conversion/Why Do Companies Issue Convertibles /Valuing Convertible Bonds/A Variation on Convertible Bonds: The Bond朩arrant Package
24-7 Private Placements and Project Finance612
Project Finance/Project Finance桽ome Common Features/The Role of Project Finance
24-8 Innovation in the Bond Market615
Summary617爼燜urther Reading618Problem Sets619
Mini-Case: The Shocking Demise of Mr. Thorndike623
25 Leasing625
25-1 What Is a Lease 625
25-2 Why Lease 626
Sensible Reasons for Leasing/Some Dubious Reasons for Leasing
25-3 Operating Leases630
Example of an Operating Lease/Lease or Buy
25-4 Valuing Financial Leases632
Example of a Financial Lease/Who Really Owns the Leased Asset /Leasing and the Internal Revenue Service/A First Pass at Valuing a Lease Contract/The Story So Far
25-5 When Do Financial Leases Pay 637
Leasing around the World
25-6 Leveraged Leases638
Summary640爼燜urther Reading640Problem Sets641
IPart EightRisk Management
26 Managing Risk645
26-1 Why Manage Risk 645
Reducing the Risk of Cash Shortfalls or Financial Distress/Agency Costs May Be Mitigated by Risk Management/The Evidence on Risk Management
26-2 Insurance648
How BP Changed Its Insurance Strategy
26-3 Reducing Risk with Options651
26-4 Forward and Futures Contracts652
A Simple Forward Contract/Futures Exchanges/The Mechanics of Futures Trading/Trading and Pricing Financial Futures Contracts/Spot and Futures Prices桟ommodities/More about Forward Contracts/Homemade Forward Rate Contracts
26-5 Swaps660
Interest Rate Swaps/Currency Swaps/Total Return Swaps
26-6 How to Set Up a Hedge664
26-7 Is 揇erivative A Four-Letter Word 666
Summary668爼燜urther Reading669Problem Sets670
27 Managing International Risks676
27-1 The Foreign Exchange Market676
27-2 Some Basic Relationships678
Interest Rates and Exchange Rates/The Forward Premium and Changes in Spot Rates/Changes in the Exchange Rate and Inflation Rates/Interest Rates and Inflation Rates/Is Life Really That Simple
27-3 Hedging Currency Risk687
Transaction Exposure and Economic Exposure
27-4 Exchange Risk and International Investment Decisions690
The Cost of Capital for International Investments/Do Some Countries Have a Lower Interest Rate
27-5 Political Risk694
Summary696爼燜urther Reading697Problem Sets698爼燤ini-Case: Exacta, s.a.702
IPart NineFinancial Planning and Working Capital Management
28 Financial Analysis704
28-1 Financial Statements704
28-2 Lowe抯 Financial Statements705
The Balance Sheet/The Income Statement
28-3 Measuring Lowe抯 Performance708
Economic Value Added (EVA)/Accounting Rates of Return/Problems with EVA and Accounting Rates of Return
28-4 Measuring Efficiency713
28-5 Analyzing the Return on Assets: the Du Pont System714
The Du Pont System
28-6 Measuring Leverage716
Leverage and the Return on Equity
28-7 Measuring Liquidity718
28-8 Interpreting Financial Ratios720
Summary724爼燜urther Reading724Problem Sets725
29 Financial Planning731
29-1 Links between Short-Term and Long-Term Financing Decisions731
29-2 Tracing Changes in Cash734
The Cash Cycle
29-3 Cash Budgeting737
Preparing the Cash Budget: Inflows/Preparing the Cash Budget: Outflows
29-4 The Short-Term Financing Plan740
Options for Short-Term Financing/Dynamic抯 Financing Plan/Evaluating the Plan/A Note on Short-Term Financial Planning Models
29-5 Long-term Financial Planning743
Why Build Financial Plans /A Long-Term Financial Planning Model for Dynamic Mattress/ Pitfalls in Model Design/Choosing a Plan
29-6 Growth and External Financing748
Summary749爼燜urther Reading750Problem Sets750
30 Working Capital Management757
30-1 Inventories758
30-2 Credit Management760
Terms of Sale/The Promise to Pay/Credit Analysis/The Credit Decision/Collection Policy
30-3 Cash766
How Purchases Are Paid For/Speeding up Check Collections/International Cash Management/Paying for Bank Services
30-4 Marketable Securities771
Calculating the Yield on Money-Market Investments/ Yields on Money-Market Investments/The International Money Market/Money-Market Instruments
30-5 Sources of Short-Term Borrowing777
Bank Loans/Commercial Paper/Medium-Term Notes
Summary782爼燜urther Reading784Problem Sets784
IPart TenMergers, Corporate Control, and Governance
31 Mergers792
31-1 Sensible Motives for Mergers792
Economies of Scale/Economies of Vertical Integration/Complementary Resources/Surplus Funds/Eliminating Inefficiencies/Industry Consolidation
31-2 Some Dubious Reasons for Mergers798
Diversification/Increasing Earnings per Share: The Bootstrap Game/Lower Financing Costs
31-3 Estimating Merger Gains and Costs801
Right and Wrong Ways to Estimate the Benefits of Mergers/More on Estimating Costs梂hat If the Target抯 Stock Price Anticipates the Merger /Estimating Cost When the Merger Is Financed by Stock/Asymmetric Information
31-4 The Mechanics of a Merger805
Mergers, Antitrust Law, and Popular Opposition/The Form of Acquisition/Merger Accounting/Some Tax Considerations
31-5 Proxy Fights, Takeovers, and the Market for Corporate Control808
Proxy Contests/Takeovers/Oracle Bids for PeopleSoft/Takeover Defenses/Who Gains Most in Mergers
31-6 Mergers and the Economy814
Merger Waves/Do Mergers Generate Net Benefits
Summary816爼燜urther Reading817Problem Sets817爼燗ppendix: Conglomerate Mergers and Value Additivity820
32 Corporate Restructuring822
32-1 Leveraged Buyouts822
RJR Nabisco/Barbarians at the Gate /Leveraged Restructurings/LBOs and Leveraged Restructurings
32-2 Fusion and Fission in Corporate Finance827
Spin-offs/Carve-outs/Asset Sales/Privatization and Nationalization
32-3 Private Equity831
Private-Equity Partnerships/Are Private-Equity Funds Today抯 Conglomerates
32-4 Bankruptcy837
Is Chapter 11 Efficient /Workouts/Alternative Bankruptcy Procedures
Summary842爼燜urther Reading843Problem Sets844
33 Governance and Corporate Control Around the World846
33-1 Financial Markets and Institutions846
Investor Protection and the Development of Financial Markets
33-2 Ownership, Control, and Governance851
Ownership and Control in Japan/Ownership and Control in Germany/European Boards of Directors/Ownership and Control in Other Countries/Conglomerates Revisited
33-3 Do These Differences Matter 859
Risk and Short-termism/Growth Industries and Declining Industries/Transparency and Governance
Summary863爼燜urther Reading864Problem Sets864
IPart ElevenConclusion
34 Conclusion: What We Do and Do not Know about Finance866
34-1 What We Do Know: The Seven Most Important Ideas in Finance866
1. Net Present Value/2. The Capital Asset Pricing Model/3. Efficient Capital Markets/4. Value Additivity and the Law of Conservation of Value/5. Capital Structure Theory/6. Option Theory/7. Agency Theory
34-2 What We Do Not Know: 10 Unsolved Problems in Finance869
1. What Determines Project Risk and Present Value /2. Risk and Return梂hat Have We Missed /3. How Important Are the Exceptions to the Efficient-Market Theory /4. Is Management an Off-Balance-Sheet Liability /5. How Can We Explain the Success of New Securities and New Markets /6. How Can We Resolve the Payout Controversy /7. What Risks Should a Firm Take /8. What Is the Value of Liquidity /9. How Can We Explain Merger Waves /10. Why Are Financial Systems So Prone to Crisis
34-3 A Final Word875
Appendix: Answers to Select Basic Problems876
